Posted
by
Hemoson Friday March 09, 2001 @02:13PM
from the just-die-already dept.

Tjp($)pjT writes "A Canadian company which bought Iridium for roughly a quarter of a cent on the dollar has scheduled the re-opening of the service. Rescued from a blazing death of dropping all 66 sats and their spares out of orbit to burn up on reentry, the 5 BILLION dollar system was purchased on the block for 25 million. The US Government contracted with the service for unlimited air time for 20,000 phones for two years with other options. More can be read here."

and I must say, it was a wonderful thing.
You could be somewhere in, say, Laos, and
if there's no military guys around, you can
whip out the phone and make a call, and it
works. This is in places where there won't
be any cell service for a very long time.
Unfortunately satellite phones are illegal
in many places, such as Laos, so you do have
to use them discretely.

I was very disapointed when the service went
away, and now I'm happy that it's back, but
I had to make a $3000 deposit on my original
service. I hope I can get some of that back,
or at least they won't ask for a deposit on
the new service.

Hm. I wonder, if NASA gets the high-altitude balloon idea working, maybe that could be used instead? Even lower latency, since the signal doesn't have as far to go, and balloons have got to be cheaper then rockets... A few hundred balloons drifting along at the edge of the atmosphere...

Well, and this is an inductive inference so take it with a grain of salt, it appears to me that in fact the Canadian company that bought the bankrupt Iridium is nothing more than a shell company that will provide the Iridium network's services to Western governments and militaries.

Take it with a large grain of salt:-) The US military, at least (and I would assume most of NATO as well) have had their own satelite comm system in place for decades. I really doubt they would see any advantage in using an unsecured commercial system. For other branches of the government, though, that don't have the need or the ability to maintain their own system of this sort, but might have occaisional need for it, contracting it out is pretty sensible. Which alone is enough to make you wonder, I guess.

9600 baud.. outgoing. Use a direcpc for the return path. That would give you 50K per second easy.
We have been using MSAT phones with Direcpc in communities without phones for years. Coupled to a linux box with Helius software http://knet.on.ca/knetrouter .

balloons are in the stratosphere i.e they move
satellites are in geostationary orbit i.e they don't move relative to the earths rotation. You need to
know where the object routing the signals is in order to do this, and balloons just don't cut it

Well, satellites that are in geosynchronous orbit don't move relative to the earth, but there are satellites that are *not* in geosynchronous orbit. To pick some unrelated examples, Iridium, Globalstar and Teledesic (if and when it becomes operational) are all networks of several satellites in lower orbits, and they do indeed move relative to the earth. I don't know what other limitations balloons have, but moving relative to the earth shouldn't be the problem (unless of course their orbit is much much lower and their relative speed is much greater. That might make a difference, I don't know).

Your company "evaluated these systems," and you spell "Iridium" wrong once, twice, thrice... tetrice... what company was that again?:) But no, really, I shouldn't talk; I spell horriblee. As long as you can convert kg to N, I feel safe...

Is it just me, or was this some sort of incredibly clever scheme to launch a few hundred satellites into orbit without paying for it...

I mean, this new company paid 25 million for the system, and then the government paid them 70 million in order to use it... how did that happen? If the network is really only worth 25 million, why would the government pay so much to use it? And if the system is worth so much more, how is it they managed to pay only 25 million? Sounds like something funny going on to me...

If it hit an opened pack of skittles _floating_ adrift, that would be pretty much it for all aboard (providing skittles don't vaporize with the 20km/s orbiting [fact?]). Some of those old packs of skittles at the movie theater are full of tough l'il bastards.

Don't get rid of your cellphone just yet:
Taken from their FAQ [iridium.com]:
QUESTION: Will the Iridium handset or pager work inside buildings?

ANSWER: The Iridium system design is predicated upon line-of-sight access to the satellite. Therefore, in-building coverage for handsets is generally not available. The Iridium pager provides a better means of receiving messages in urban locations and can be used inside buildings. In any case, callers who are unable to reach the subscriber on an Iridium handset for any reason will have the option of leaving a message that will be delivered the next time the handset has line-of-site access to the satellite constellation.

OR, get an antena/receiver & link for the top of your vehicle which is so "1st generation cellphonish".

I don't think anyone here is going to know or remember an occurance that happened several months ago, when a transport ship carrying Canadian tanks and other military equipment was boarded by the Canadadian military just outside of Canadian waters in the north Atlantic after it refused to come in to port and deliver its cargo because the captain of the ship had claimed that the shipping company had not received full payment. During the media coverage of the event, in Canada, it was revealed that there were in fact several 'shell' companies that had contracted the cargo ship for the Canadian military. I want to use that fact to illustrate the use of supposedly legitimate companies by militaries and governments to contract services for themselves without letting on that in fact the work being contracted is for military use. So, what does that have to do with the current Iridium business? Well, and this is an inductive inference so take it with a grain of salt, it appears to me that in fact the Canadian company that bought the bankrupt Iridium is nothing more than a shell company that will provide the Iridium network's services to Western governments and militaries. But then, you already knew that, didn't you?;)
--CM

I'm pretty sure that if you read carefully, the Canadian company in question is just one part of a consortium of companies that are selling the services. This company only has rights to sell the service in Canada. The consortium is actually Iridium Satellite LLC, I think.

However, the real question will still be "who will be paying for it"? Sure, eskimos in Greenland and nomads in the middle of Sahara would like to make phone calls. But there just isn't big enough and/or rich enough (wealth x numbers) user base to ever make it profitable on its own (there are airline passengers, but it's easier to build a dedicated system like some other poster explained... perhaps ships might need it, but that's hardly a huge market segment either)

Cell phones can take the cream, build the networks in densely populated areas, and satellite phones have the niches outside. The problem is that cheaper system gets better customers base, while the expensive one gets left-overs.

Of course, if US government can afford to have such a system for their total communication needs, kudos for them. Just doesn't look like it'd be feasible on 'pure' commercial corporate basis.

In fact, this reminds me of "mobile web will remove the need for fixed lines" thing some people believe. Each system has its own benefit, and for fixed lines it's practically unlimited bandwidth without (overly) complex hardware (both compared to cellular networks). So, if it's ok that you usually don't have to be mobile yourself, it makes sense to have your home system connected through fixed lines, not mobile network. Why on earth would you waste your money (and radio frequency resources etc etc) to do almost the same thing (but not quite as well), paying much more? On the other hand, in those cases where you do need to move, it should be quite ok to have secondary 'backup' mobile system to use, to complement the 'main' system. Might be the same for satellite phones, then... If the astronomic hardware costs don't kill it before.

The low startup cost to the new company will allow them to break even sooner, keep costs down, and make sure they're marketing to the right kinds of people - those who want cell phone service ANYWHERE.

The low startup costs might help, but in order to cover their operating expenses, these guys are going to have to charge astronomical amounts. It's a catch-22: they have to charge high prices to cover their costs, which decreases the size of their market, which increases their marginal costs,... [ repeat ad nauseum ]

This is how this sort of thing could work - I don't know if this is how Motorola did it, but it's how I'd expect it to be done.

Motorola forms a company, Iridium Inc., which they give some amount of money to. Iridium Inc. also gets money from other investors, who get an equity stake in it in return (i.e., they own part of the new company). It further borrows money from banks who are willing to lend it cash, and issues bonds which pay a certain amount of interest. The banks and the bond buyers are betting that its business will work, and that they'll get the interest and eventually get the principal back.

Iridium Inc. then spends all this money on satellites and launch costs. Nobody uses its phones and it runs out of money. The first thing that happens is that it stops paying interest on its bonds and loans. Even that isn't enough, and it declares bankruptcy and is dissolved (there are several possible layers of bankruptcy, but in this situation they blow through all of them). All its assets are sold off; this is how the Canadian company bought the satellites. The pittance that doing this brings in is distributed to all the people Iridium Inc. owes money to.

So who lost $4,975,000,000? Motorola lost the money it put in, as did all the investors, banks, and bond-holders. The risk was spread out, so it didn't wipe Motorola out. Because it was a separate company, its bankruptcy doesn't affect Motorola directly: Motorola isn't on the hook for the money everyone else lost. They knew what they were doing when they invested, and this sort of thing is a normal risk of investing in any business.

Actually, the target market includes airtraffic, as normal cell/digital phones have substantial problems when communicating with multiple towers as they fly overhead. Thus, with decent marketing, they could offer this to airlines (two phones/plane, a few thousand planes, nice way to start up a new company) in addition to merely people who plan on communicating from remote locations...

Why stop there -- I'm gonna put up a crap load of paper satellites. They burn better on reentry, use less fuel to manuever, and best of all, they might not completely destroy the ISS [nasa.gov] if they change their orbit.

Does anybody know what the data bandwidth potential is with the Iridium satellites? Could this be a cheaper and better alternative for computer users in remote parts of the world than something like more traditional satellite uplinks?

It really looks like there is no market for a telecomunications network like Iridium. No matter who purchases it, prices to the public will still be high. It has already been proven in Europe that ubiquitous mobile communications are possible without the need for expensive sattelite systems. The US government should spend their money on something more productive, like healthcare.

Now, if my calculations are correct Motorola basically just lost $4,975,000,000. Do I err in saying that they do not possess that amount of cash? Why does Motorola still exist? Why haven't they blown up? How do you lose the entire GDP of Ethiopa and still exist as an entity that can credibly function as a for-profit business? I'm serious, can someone explain this to me?

It's likely not viewed as a market 'cause personal phones are very unwelcome on aircraft.

They're noisy little transmitters with lots of spill-over, spill-over that can affect the avionics. Many civilian aircraft already come with tested-and-approved Skyphone-type services, they're not gonna start allowing some bozo back in the cabin pull out his sat-phone and start broadcasting.

Whine how you want about the FAA being too conservative it's not gonna matter, it aint happening soon. As to the service-providers suggesting any such thing, nooo way they wanna get hit with any litigation if a plane goes off course / goes down.

This could be of use to folks in the aviation industry as it's not unusual to ship out on short notice for emergancies (no, not just crashes, typically repairs in odd places etc.) For those folks this is a big win. I've a buddy in Yellowknife tonight inpecting a an aircraft with problems I'm sure he'd love a phone number that HQ could reach him on wherever he is at the moment without him hoping there's a cell. service that he can get onto.

A professor uses the Iridium network to map
the flows of magnetic field around the earth.
It is particularly interesting this year because
it is a Solar Maximum with magnetic storms
emanating from the Sun now and then.
Each Iridium Satelite contains a magnetometer
for helping keep them oriented.

During the planning stage of the Iridium project, it was spun off by Motorola to form a unique corporation. I've heard that this was at the insistance of the FCC (who didn't want to see a single company control both the hardware and service), but have nothing substantial to back that statement with.

Thus, Motorola made the phones, and Iridium provided the service.

So, Iridium is bankrupt. Its creditors, including Motorola and doubtless others, have collectively lost $4,975,000,000.

IANAA (I Am Not An Accountant). IA[also]NAL. But, being bankrupt means that your assets are liquidated to the highest bidder, the proceeds of which are fed to those you owe. The sale of assets may not cover the entirety of what you owe, and it doesn't really matter. Hence, the beauty of having unique corporate entities to do dirty work with.

Err, umm, hate to rain on your parade, but what about this quote from the article?

"We're very vertical-market oriented in areas such as the construction, marine, forestry and oil-and-gas industries, focusing on remote applications and also things like emergency services and aviation."

The problem is that almost all the comparisons you see talk about the Federal tax VS European Federal taxes. Our taxes are lower on that level, BUT MOST European countries have almost no state and local taxes

If you live in a "High Tax" state, like NY, by the time you get done with Federal and State Income taxes, you can hit the 50% mark, and often do! You see, to make up for the high cost of living in NY, they pay you more, so that the average income is higher. It leads to "Bracket Creep"

Then you have to add in Local taxes, and various excise taxes. For instance, why does Gas in NY cost 10 cents a gallon more than gas 100 yds aweay in NJ? State taxes. Want to know what you pay in property taxes around here? Got 8k a year?

I have a question relating to the 'saving' of these satellites. It also relates to the impending scuttling of Mir.

Why do space people even bother bringing old stations and satellites back to burn up in the atmosphere?

I understand it is very expensive to put stuff up into space, so would it not make sense to leave it up there? Could we not use the parts at some time in the future if they were left behind.

And in the case of the space fungi growing on Mir etc, is it not of interest to have man made stuff left up in space for us to study how it interacts with cosmic rays, prolonged exposure to space environment and whatever else happens up there?

Why can't we set this stuff adrift to float toward the moon or something?

I'm sure there's a reason for this. I just don't know what it is. Does anyone?----------------------------

It's been noted the squillions lost by the original investors, and how maybe Mot should have poured in more. But thankfully, even after all that carnage, there's a chance a product will come out at a price the market can afford and which will sustain the company. After all, unlike Teledesic and all, Iridium is at least _up there_.

My guess is that the markets burned the original investors who had hoped for first - mover monopolies, and that in a way is sweet.

also sweet is a real chance for me not to be stuck with out terrestrial GSM monopolies (UK has four, One2One, Vodaphone, Cellnet, Orange) which stupid, or self serving governments don't realise a monopoly div by n is just one encumbant with best capital picking cherries and several followers too scared not to take the cosy fruits of symbiosis back to the shareholders. With only 4 choices, these companies just "[brand] value associate" themselves with different sets of customers and screw on any chance of working technology like GPRS or 3G. The smaller outfits can always claim to be competitive, because the big guys always price for pain.

I'm still arguing with Cellnet why they doubled my c. $1000/yr standing charge for flat roaming across Europe (Europe One Rate), without giving me the option to exit. (was signed for 12 mth rolling to get the rates). Anyone remember being compensated for suddenly expensive flights by British Airways when the Supreme Court ruled Freddie Laker got fsked by them? I digress.

You don't pay high taxes. That is a lie perpetrated by the super-rich owners of the media in order to get their tax rates lowered.
Of course if you want to talk about a waste of money, I'd like to direct you to 'son of Star Wars' - designed to neutralise a non-existent missile threat.

There is only one operating system designed to meet the eccentric running / not-running / purchased / not-purchased / new / dead status of Iridium...
Will they be purchasing Amiga next week or the week after?

They could also start marketing to replace current cell phones for those people that are worried about safety. I can see the ads now: scene of a car crash on a deserted road, weeping kids trying to call for help on a traditional cell phone while mom lies unconscious at the wheel of the car, camera closeup on the "no signal" message. Sorry to be morbid, but they could sell a lot of these.

Is $1500 (especially if it's added to the cost of your Mercades Benz ) too much to spend on the security of your family? Of course you are only going to use it for emergency calls, right, so you don't need to worry about the $1.50 a minute cost.

Get one for your boat, your car, your plane... if you put them in a nice, cherry wood case they'll probably quickly become status symbols, just like the original "car phone".

In the case of Iridium, it's a fairly (under 5 years in orbit)new satellite system, that despite the owners having gone bankrupt (the buyout happened in late 2000), is very much operational and current technology... The Iridium satellite network had sold very few phones, due to a $3,000 price tag... However, they also allow for worldwide wireless net access as well as voice communications... Useful if you're stuck in the boonies, or doing scientific studies in areas where there aren't cel/telephone systems in place...

Largely though, the lack of sales was due to rabid competition from existing local and national cellular phone technology... It still is a viable technology, just don't expect it to sell in any country that practically gives cel phones away...

As for the story itself, it's old (3 months hence) news, originally viewable at:

IIRC, the sat collection cost $8M/month to run. They have already set a two year gov contract for $72M which covers six months of operational costs. They seem to have set themselves up as a wholesaler otherwise; currently having twelve resellers. That makes a lot of sense to spread the operating cost onto them while taking in initially (probably) small contracts from them. This really does have the chance to work, especially if they get the renewed gov contract in two years... which is likely considering gov spending.

People are going into business with sound ideas, even if they are risky ventures.

The thing that stood out most about the article was the fact that the new owners aren't even *trying* to market to the cellular world. They're going after peeps who can't use cellular/pcs becuase of their location(s). Despite the fact that this is an incredibly risky venture, it shows that people are less and less high on the 'tech boom' and more and more savvy about what their trying to do.

That said, it's a pretty sad state of affairs for the U.S. that this took a Canadian to get it working. (Some of my best friends are Canadian...)

There's also the problem with having floating space junk such as adrift sattelites slamming into spacecraft or functioning sattelites. Difference in orbits can create immense velocity differentials. If the spaceshuttle were to impact a 'lost' Iridium bird, that would be pretty much it for all aboard.

SVs at all altitudes are required to remain within control boxes a few km on a side.

The thing that decays orbits faster at LEO is that there is actually a little bit of atmosphere out there, constantly braking the orbit. But that's still pretty small.

What makes all the control really necessary is the difficulty of computing trajectories more than a couple of days out from feedback data that is only good to 3-6 significant figures. Today's corrective bump is next week's broken crosslink. And as long as you're going to have to do all that control, and make and break links semi-randomly, you might as well justify it by putting the birds right on the deck where you can get good signals and short propagation times.

the target market includes airtraffic, as normal cell/digital phones have substantial problems when communicating with multiple towers as they fly overhead.

That market is already sewn up for over-land flights. If you've been in an airliner recently you've certainly seen the phone in the back of the middle seat in each row of three. These operate from plane-to-ground through a dedicated set of ground stations, and don't have the expense or complications of going through satellites.

There would be a market for satellite phones, and data connectivity, for trans-oceanic and trans-polar flights. When you consider how long it takes to go to Japan or Australia, lots of business types would probably be happy to spend $1.50/minute for voice or $5.00/megabyte for data so they can keep working. When you consider what their time can be worth, that's cheap. It's fewer planes to hook up, but you've got the market to yourself. Might be even more profitable.--
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Yes with the amazing bandwidth of 2400 baud at only $1.50 a minute you too can be online (online connection subject to disconnection at random with an mean of about 7 minutes.) I've used Iridium data services, and it was the only time in modern times when I just catted my email to the terminal (in log mode) rather than try to run pine. Iridium data is good for tiny transmissions of metadata and perhaps small "pages" but it is connection oriented at the phone (not "always on" ) and quite a bit more picky than their voice service. On the other hand, it's one of the cheapest ways to get satellite airtime and has a much higher bandwidth than your average consumor bidirectional satellite connection (with WAY better latency).

Iridium may not look all that great next to cell phones in areas where you can acually get cell phone coverage (like all of Europe and about 1/2 to 1/20 of the US depending on how modern a service you want (the more modern the service the worse the coverage in general), but it really shines compared to other satellite services available to the general public. Maybe we were to0 hard on Iridium...

Down that path lies madness. On the other hand, the road to hell is paved with melting snowballs.

I checked their website, and they are asking existing Iridium customers to get their phones upgraded so they can accomidate data transmissions. They do have a "Data Kit" which makes it work like a wireless modem or Richocet modem.

Satellite phones have their uses, especially for very remote areas. The article indicates that Iridium was originally going after regular cell phone users, and that's just plain wrong. The low startup cost to the new company will allow them to break even sooner, keep costs down, and make sure they're marketing to the right kinds of people - those who want cell phone service ANYWHERE.

In areas that lack the infrastructure needed to support mobile communications, a network like Iridium makes greate sense. Keep in mind that this is the state of affairs in the vast majority of the world; and natural disasters can easily disrupt communications even in a techologically wired area, effectively without notice.

I'm not surprised that the US government has signed on for a big contract. There are very few private citizens who have the absolute, essential need to have phone service under any circumstance. On the other hand, government agencies routinely send civilian employees into less-than-optimal environments - fighting forest fires, dealing with the aftermath of a hurricane, medical mercy missions - where being able to pick up a phone and just have it work, no matter what, suddenly makes managing things a whole lot simpler.

It's very difficult to put something into orbit and then have it stay in that exact same orbit for ever and ever.

Even the moon's orbit changes very slightly from day to day. Due to gravitational effects, the moon will slowly stop rotating in the distant future as well.

For items closer to the planet, their orbits are much less stable. Gyroscopes, jets, and small rockets are required to make orientation changes and orbit corrections from time to time to adjust for small orbit changes.

Low Earth Orbit sattellites such as the Iridium birds require much more control to keep their orbits from decaying than a higher-altitude sattellite.

Motorola et al. ate the US$5e9 cost of the satellite constellation, and sold it for a mere US$2.5e7. They didn't dump it in the ocean, they sold it to someone who thought they could make money with it. As long as the operating costs are low enough that you can get positive cash flow, there is no reason to dump the satellites; you can always recoup some money by selling to someone with another business plan.

This means that Iridium isn't going to go into the ocean until one of three things happens:

The satellites break down or run out of propellant.

The market for services which can be offered using the satellites won't support the operating costs.

The market takes off, and the spectrum becomes so valuable that the satellites have to be dumped to make room for better ones.

Until then you can expect to see one operator or another trying to eke out some money from Iridium's shrinking cluster of birds.--
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I used to work for a tech company that evaluated these systems. Back in the day Irridium was thought to be a total joke - the idea was (apparently, correctly) that MEO (medium earth orbit) satellites were just too difficult and expensive to use for profitable telecom.

However, all the heat went off Irridium and its 60+ MEO satellites when Gates and McCaw backed Teledesic, which called for something like 200+ LEO satellites to deliver broadband Internet worldwide. Obivously, LEO satellites are even more complex and difficult to manage (handoffs, launches, etc.) that MEO.

I just look up Teledesic [teledesic.com], though, and it is still going strong. Clearly still vaporware, but it is interesting that they have not given up in light of Irridium's continuing woes.

The latest press release from the Canadian company that bought the Iridium system, Iridium Satelite LTD, announced their latest plans for the failing system. They plan to try to land all 66 satelites on the asteroid Eros. "If the United States thinks they can outdo us by landing a dinky space craft on that asteroid, they're aboot to get another thing coming, eh?".

Rumor has it they will land the satelites to either spell the word "7-Up" or "Chairhead".

The market segment for this service is not the normal cell phone user as they point out. They fail to mention that the real market for this service is in avionics. If you are sitting up in a plane, well, to say the least, cell phones don't work. The signal hitting a ton of towers at once is not a good thing for the old cell phones. The government and airlines use these phones in planes. The government also uses them the way that the article says, for when a cell phone isn't going to work. Say for instance when you are going to be traveling all over the world. (Yeah, Yeah, let me take my US phone to Europe, oops, what do you mean it doesn't work there.)

I just found it surprising that they failed to mention the aviation industry, since that is who uses, sells, and produces a lot of the phones.

I can't stand waiting any more...
The endless disappointment of Mir being
kept in orbit...
The on-the-edge-of-your-seat-anticipation
waiting for dozens of satellites to crash
and burn... only to be DENIED!